The clichÈ handbook says that February is the month of Valentines and proposals, but unfortunately love wonít always follow the script.
New research out today from Experian CreditExpert highlights an increase in the number of people filing for a financial separation via their credit report as former couples look to avoid adding inherited bad debts and poor credit rating to the heartache of a break-up.
The figures reveal a 15% increase year on year in former couples requesting a financial ìdisassociationî, which is where financial ties on credit reports are severed. As of April 2011, almost half (49%) of all Experian CreditExpert members had a financial associate (a link with someone else) on their credit reports. This will usually be because they have applied for a joint mortgage or bank account with a partner or spouse.
Peter Turner, Managing Director at Experian Interactive, UK&I, explains: ìCreating financial ties with a partner or spouse, such as a joint mortgage or bank account, is a big yet natural step to take in a relationship. However, should the relationship end, itís crucial to ensure that the joint financial links binding two people together are also separated. Whilst thinking about finances in the middle of a break-up can be the last thing on someoneís mind, it can also be the first step towards regaining financial independence.î
A financial association will stay on a credit report regardless of whether or not the relationship has ended, unless a request to have it removed is made to Experian and the other two credit reference agencies.
Details of the credit and how it is being managed, whether positive or negative, will remain on a credit report for at least six years, making it important to eliminate any potential negative marks by not keeping your finances tied together any longer than necessary.
Peter Turner adds: ìMarriage doesnít link up credit reports but joint credit will. Associations can be removed on request, once all financial links with a past partner or spouse have ceased. Even if a joint mortgage is still shared, but all other financial links have ended, we may still be able to create a disassociation if the former couple no longer live together.î
Lenders may take account of an association on a credit report and look into listed partnersí credit history as well as that of the named person making the application. This can adversely affect their decisions and the rate of interest charged.
Checking your own credit report will reveal your financial associates, although their financial information is not shown.